How Bitcoin Could Mitigate the 48% Surge in Online Banking Fraud

Online banking fraud rocketed 48 % to £60.4 million in 2014 compared with 2013, according to a report released by Financial Fraud Action UK (FFA UK).

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Online banking fraud rocketed 48 % to £60.4 million in 2014 compared with 2013, according to a report released by Financial Fraud Action UK (FFA UK). As opposed to online banking where users can only rely on banks to secure their funds, Bitcoin is the great alternative which allows users to have an option of holding and securing their money.

In spite of the 53,192 actual incidents of online banking fraud in the UK, FFA calls the issue “relatively modest” in a country where 30 million people use online banking. The figures in the report of FFA show a significant increase in the online banking fraud, however. FFA blames the rise in fraud on malware and confidence tricksters tricking users out of personal details. These statistics are not something that we are not familiar with and, in fact, unfortunately, these frauds are something that has been regularly happening.

Security in online banking is applied in different layers from the client to the communication channel as well the servers. FFA highlights and clearly states that clients are the point of failure in most of the cases. However, clients only follow the simple instructions provided by the service providers to use online banking services and are not aware of the complicated security systems of banks and their black boxes.

Lack of transparency causes these kinds of issues as users are not aware how these systems work and for security purposes, banks do not share security information in detail with their customers. At the same time, users are not able to take responsibility for their money and are forced to trust black box security systems provided by the banks which can be inefficient and not secure.

For the very least, insurances and governments help to cover the loss in most of these frauds which, give confidence for users to use these online banking services. On the other hand, there have been many cases where users had issues getting compensation from the banks and banks refusing to pay users back for something that should mostly be considered as banks fault.

Bitcoin is argued to be insecure, and since it is not yet really regulated, people can’t get any compensation for their loss. At the same time, it gives the option for users to take responsibility for his/her money by providing a transparent system, unlike the banks. It is only the users fault if his/her bitcoin is lost, unlike the banking system which things are unclear and complicated.

With the right security practices, Bitcoin can provide the securest and the most transparent payment system that could replace inefficient and unsafe banking payment services.

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